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Bulletin 2008-04

January 28, 2008

Application Requirements for Sour Gas Development—Directive 056

1 Introduction
The Energy Resources Conservation Board (ERCB) is advising all companies that Directive 056: Energy Development Applications and Schedules will be expanded to enhance the application requirements for sour gas development near people. These requirements will come into effect with a planned release of the directive in May 2008.

2 Background
In December 2000, the Provincial Advisory Committee on Public Safety and Sour Gas produced a final report that contained 87 recommendations for addressing public safety and sour gas. In Recommendations 7, 32, and 33, the committee noted that a greater effort was required to reduce the proliferation of sour facilities near people and that more information regarding future development plans should be provided to people near sour gas developments as part of the ERCB’s application and licensing process. In response to these recommendations, an Oversight Committee consisting of public, industry, and regulatory participants monitored sour gas development applications over a two-year trial period to determine if the Recommended Practices for Sour Gas Development Planning and Proliferation Assessment (May 2004) (Recommended Practices)(1)  would be effective in responding to Recommendations 7, 32, and 33.

In its Final Report—Outcomes and Recommendations from the Oversight Committee to the ERCB(2),  the Oversight Committee noted that when the Recommended Practices were followed, the effect was consistent with the intent of Recommendations 7, 32, and 33 and the Recommended Practices were an effective approach to developing and maintaining good relations with the public.

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(1) The Recommended Practices were released under the auspices of the Canadian Association of Petroleum Producers (CAPP), the Canadian Association of Petroleum Landmen (CAPL), and the Small Explorers and Producers Association of Canada (SEPAC).
(2) The final report will be released electronically on the ERCB Web site www.ercb.ca concurrently with this bulletin.

However, because industry participation during the two-year trial was less than expected, the Oversight Committee subsequently recommended that a requirement to follow the Recommended Practices was necessary to meet Recommendations 7, 32, and 33.

3 Application Requirements for Sour Gas Development
The ERCB intends to make the use of the Recommended Practices a regulatory requirement in the edition of Directive 056 planned for release in May 2008. Once the update is released, all applicants proposing sour gas development (i.e., wells, facilities, and/or pipelines) near people will be required to meet the new requirements in Section 8.3 of Directive 056.

Applicants will be required to follow the Recommended Practices in all circumstances where residents are within the EPZ. This includes

1) conducting an assessment of existing facility and pipeline infrastructure within a 15 kilometre (km) radius to evaluate the feasibility of using or upgrading an existing facility and of forging commercial partnerships with existing licensees; and
2) expanding the project specific information package to include
a) a detailed description of the project, including future wells, pipelines, and facilities,
b) the results of the assessment of existing infrastructure,
c) a Sour Gas Project map of the assessment area that identifies proposed wells, pipelines, and facilities, as well as current land use and the existing infrastructure that was assessed, and
d) the anticipated timing of the project from licensing through to production operations.

In instances where there are no outstanding unresolved objections or concerns, the applicant may file a routine application with a letter indicating that no objections exist and that the applicant followed the recommended practices. Those applications would be subject to the existing criteria for a post-approval audit as defined in Directive 056.

Applicants that receive objections or concerns will be required to submit all documentation identified above with their nonroutine applications. In this case, companies may also be required to prepare and distribute an area development plan and to submit all applications associated with the proposed sour gas project (i.e., facilities, pipelines, and/or wells) at the ERCB’s request.

Until the release of the updates to the directive, the ERCB reserves the right to request that applicants complete any or all of these requirements on nonroutine submissions currently under review if there it appears that doing so can assist with processing of the application.

4 Additional Information
Directive 056 will be updated to incorporate these sour gas development application requirements into Section 8.3, as well as to itemize associated audit and nonroutine submission requirements. Any other updates currently under review will also be incorporated into the directive for the upcoming release.

The ERCB will work with CAPP during the spring to develop a seminar to help applicants understand these requirements and what is needed to meet the Recommended Practices. Information on these sessions will be posted separately on the ERCB Web site.

Further information on sour gas planning and proliferation is also available at
• http://www.publicsafetyandsourgas.org/, and
• http://capp.ca.
 
Questions regarding the new application requirements may be directed to
• Facilities Applications Help Line: 403-297-4369
• Facilities Applications fax: 403-297-4117
• E-mail: Directive56.help@ercb.ca
• Facilities Applications Representatives:
  Dale Schafer— 403-297-8189
  Gavin McClenaghan— 403-297-6847
  Martin Vandenbeld— 403-297-4614

<original signed by>

E. A. Shirley, P.Geol.
Executive Manager
Applications Branch